Mid-sized financial institutions looking to stay competitive could learn a thing or two from both their larger and smaller counterparts.
Because when it comes to innovation, newly published PYMNTS research reveals that mid-sized FIs are missing the mark – and are not only failing to keep up with both big banks, but also emerging FinTech challengers.
According to the latest Innovation Readiness Playbook, none of the mid-sized FIs are ranked among the space’s top performers, while more than 11 percent were in the proverbial basement, coming in among the bottom 15 performers in the Playbook.
Remaining are the 88.9 percent of mid-sized FIs filling in the middle portion of PYMNTS’ rankings. But why are these FIs lagging behind?
The leading cause may be a lack of planning for the future. More than three-quarters of top performers say they plan to add new features and products in the next three years, while only 30 percent of mid-sized FIs share the same focus. What’s more, 15 percent of FIs say they haven’t even settled on their long-term goals.
There’s more to finding success than just smart planning, however. Mid-sized FIs that want to climb out of that stagnant middle will also need the right combination of infrastructure, speed and funding.
Other key takeaways from the latest Innovation Readiness playbook:
- The best-performing FIs focus on consumer engagement. Eighty percent of top FIs say they are focused on engagement in the next three years, compared to just 40.7 percent of middle performers.
- Top performers allocate an average of 75 percent of payments budgets toward innovation projects, while 67 percent of mid-sized FIs allocate less than one-quarter of their budget.
- Funding won’t get FIs far without the right infrastructure – 41 percent of mid-sized FIs said their core systems were well-suited for innovation. Meanwhile, 73 percent of top performers said their core systems were suitable.
To find more news and insights, including more than 100 data points, check out the new Playbook by filling out the form below:
About the Playbook
The Innovation Readiness Playbook, in collaboration with payments and commerce solutions provider i2c Inc., gauges where banks are on the road to becoming innovators. The FI Segments Payment Performer edition of the Playbook is designed to examine whether mid-sized financial institutions, those with assets ranging from $5 billion to $25 billion, are succeeding at innovation, if they outperform others, and what could help them improve. The findings in this Playbook are based on survey responses of 214 FIs in the U.S., who scored the institutions from zero to 100 in terms of innovation readiness.